System and method for managing tier-priced commodities transactions

• US 7,577,606 B1
• Filed: 01/12/2005
• Issued: 08/18/2009
• Est. Priority Date: 06/11/1999
• Status: Expired due to Fees

• Current Assignee: Robert M. Ford
• Original Assignee: Robert M. Ford
• Inventors: Ford, Robert M.
• Primary Examiner(s): MEINECKE DIAZ, SUSANNA M
• Application Number:
  US11/034,293
• Time in Patent Office: 1,679 Days
• Field of Search: 705/26, 705/36.R, 705/37
• US Class Current: 705/37
• CPC Class Codes: G06Q 30/0601 Electronic shopping [e-shopping]
• CPC Class Codes: G06Q 30/08 Auctions
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/08 Insurance
• CPC Class Codes: G06Q 50/06 Energy or water supply

Abstract

Methods and systems for managing the sale of a tier-priced commodity are described. Risk is managed by bundling with the commodity at the lower tier a financial instrument designed to indemnify against the risks associated with purchasing the commodity at the lower tier. The financial instrument may be an insurance instrument, for example. In one embodiment, prices of a commodity at two and a price or value of a financial instrument are determined. The purchase price of the bundled product is a function of the price of the commodity at the lower tier and the price or value of the financial instrument, which may depend, in part, on the purchaser. Different prices may be offered to different purchasers for respective bundled products. Other embodiments relate to selling bundled products over a network, such as the Internet, auctioning bundled products, and searching for the best price of a bundled product.

Claims

1. A method of operating a processor coupled to a network to manage the sale of a commodity, the method comprising:

providing, by a processor, over a network, a respective price for a respective bundled product to each of a plurality of bidders, each bundled product comprising the commodity and a financial instrument to indemnify against loss associated with at least one risk related to purchase of the commodity by a respective bidder;

receiving, by the processor, via the network, bids for respective bundled products from bidders; and

determining, by the processor, which of the bidders to sell a respective bundled product to based, at least in part, on which of the bidders exceeds their respective price by a greater amount.

2. The method of claim 1, further comprising:

selling, by the processor, over the network, the respective bundled product to the respective bidder who exceeds their respective price by the greatest amount.

3. The method of claim 1, comprising:

determining the respective prices by the processor based, at least in part, on a price for the commodity for sale to each respective bidder with the at least one risk and a value for the financial instrument to indemnify each respective bidder.

4. The method of claim 3, wherein:

the values of respective financial instruments are based, at least in part, on one or more factors associated with each respective bidder.

5. The method of claim 1, comprising:

providing a respective price to a respective second processor, via the network, to be displayed to a respective bidder.

6. The method of claim 5, comprising:

receiving bids by the first processor from the respective second processors, via the network.

7. The method of claim 1, wherein the commodity is chosen from the group consisting of electricity, natural gas, water, and telecommunications services.

8. The method of claim 1, wherein:

the at least one risk includes a risk of interruptions in delivery to each bidder; and

respective insurance instruments indemnify against loss associated with the interruptions.

9. The method of claim 1, wherein the financial instrument is an insurance instrument.

10. A system to manage the sale of a commodity, the system comprising:

memory storing data related to prices for respective bundled products, each bundled product comprising the commodity and a respective insurance instrument to indemnify against loss associated with at least one risk related to purchase of the commodity by each of a plurality of respective bidders; and

a processor coupled to the memory, wherein the processor is programmed to;

provide each respective bidder a respective price for a respective bundled product;

wherein the processor receives bids from respective bidders and the processor is further programmed to;

determine which of the received bids from the respective bidders exceeds the respective price provided to each bidder by a greater amount; and

determine which bidder to sell the respective bundled product to based on the determination of which of the received bids exceeds their respective price by the greater amount.

11. The system of claim 10, wherein the memory further stores data related to commodity price data and insurance valuation data, and the processor is further programmed to:

determine the prices based, at least in part, on a respective price for the commodity for sale to each bidder with the at least one risk and a value for the respective insurance instrument.

12. The system of claim 10, wherein:

the values of the insurance instruments are based, at least in part, on one or more factors associated with each respective bidder.

13. The system of claim 10, wherein the processor is coupled to a network and is further programmed to:

provide the prices to one or more respective second processors, via the network, to display a respective price to one or more respective bidders.

14. The system of claim 10, wherein the commodity is chosen from the group consisting of electricity, natural gas, water, and telecommunications services.

15. The system of claim 10, wherein:

the at least one risk includes a risk of interruptions in delivery to each bidder; and

respective insurance instruments each indemnify against loss associated with the interruptions.

16. The system of claim 10, wherein in the processor is further programmed to:

sell the respective bundled product to the bidder exceeding their respective price by the greater amount, over the network.

17. A system to manage the sale of a commodity, the system comprising:

memory storing data related to commodity price data and insurance valuation data; and

a first processor coupled to a network, the processor programmed to;

determine a respective price for each of a plurality of bidders for a respective bundled product comprising the commodity and a respective insurance instrument to indemnify against loss associated with at least one risk related to the purchase of the commodity by each bidder; and

provide to a respective second processor associated with each respective bidder the determined respective price;

wherein the first processor receives bids for the bundled products input by the respective bidders from respective second processors via the network, the first processor being further programmed to;

determine which of the received bids from the bidders exceeds the respective price provided to each bidder by a greater amount; and

sell the bundled product to the respective bidder exceeding their respective price by the greater amount, via the network.

18. A system to manage the sale of a commodity to at least first and second bidders, the system comprising:

memory storing data related to commodity price data and insurance valuation data; and

a processor coupled to a network, the processor programmed to;

determine a first price for a first bundled product comprising a commodity and a first insurance instrument to indemnify against loss associated with at least one risk related to the purchase of the commodity by each bidder; and

provide the first price to the first bidder;

determine a second price for a second bundled product comprising the commodity and a second insurance instrument to indemnify against loss associated with at least one risk related to the purchase of the commodity by each bidder; and

provide the second price to the second bidder;

receive first and second bids for the first and second bundled products from the first and second bidders, respectively;

determine which of the first and second bids exceeds their respective first and second prices by the greater amount; and

sell the bundled product to the bidder that exceeds their respective price by the greater amount.

19. The system of claim 18, wherein the processor is programmed to:

provide the first price to a processing device of the first bidder coupled to the network; and

provide the second price to a processing device of the second bidder, coupled to the network.